Ariba to buy Agile Software

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With Monday's announcement that Ariba will acquire Agile Software in a stock swap valued at $US2.5 billion, Ariba is making it clear that it wants to marry business-to-business (B2B) commerce to collaboration for a single, unified platform for B2B trading, an analyst stressed.

Larry Mueller, president and COO of Ariba, said the merger is a watershed event in B2B e-commerce because it signals the next wave of online trading between businesses.

"It is companies gaining competitive advantage through Internet-based coordination with their strategic partners," Mueller said. "The key to B2B collaboration is to share product information between companies. They can get competitive advantage by using the Internet to overhaul their extended value chain."

Karen Peterson, an analyst at Gartner Group, said the acquisition is very significant in the B2B market, especially in the high-tech sector because 80 per cent of Agile's business is in this market.

In addition, the acquisition bolsters Ariba against competitors such as SAP, Oracle and i2 Technologies, companies that have been saying they do not have this type of collaborative technology, Peterson said. "That message is going to have to change," she added.

Those enterprise customers that are not in the high-tech sector may have to proceed with caution when working with Agile, because the majority of its experience is in this sector, Peterson said.

In the future, Ariba may need to acquire other companies to round out its B2B offerings, especially in the areas of content and supply-chain planning, Peterson said. "They could build some of that themselves . . . but it probably would be faster for them to buy it," she said.

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